Some capital markets franchises make their name for sheer volume, topping the deal rankings by simply being everywhere. Others take a different tack, picking spots where they know they excel and then doing so. For yet again being on some of the most challenging and intellectually demanding deals in the review period, Morgan Stanley is North America’s best bank for financing.
The rapidly changing rate environment, which continued into 2023, meant that more than ever clients needed real advice, not just execution.
When conditions are benign, many deals simply need banks to be there to distribute. But 2023 was not that kind of period.
“We wanted a more predictable year in 2023 than 2022, but it didn’t turn out like that,” says Mo Assomull, head of global capital markets at Morgan Stanley. “It was not what most people expected. This makes our role more critical and interesting as we are trying to come up with complex solutions for clients.”
Morgan Stanley certainly did that, whether on complex multi-product situations for storied issuers or for niche names that demanded specialist expertise.
No mandate better illustrated the firm’s prowess than the work it did through the year for Enbridge, the Canadian energy and pipeline company.
When Enbridge was buying a gas utility portfolio from Dominion Energy, Morgan Stanley was not only one of the lead financial advisers on the $14 billion strategic acquisition but was also lead left arranger on the $9.4 billion fully committed one-year bridge financing that was signed in September. Even the bridge was complex, since the acquisition was taking the form of three separate deals that were not cross-conditioned.
Morgan Stanley then played a critical role on the take-outs, acting as joint active bookrunner on a C$4.6 billion ($3.36 billion) bought deal equity financing that was registered in the US and Canada – the biggest bought deal in either jurisdiction since 2009.
It was also lead left active bookrunner and billing and delivery agent on a four-tranche $3.5 billion issue of senior unsecured notes in November, the borrower’s biggest US dollar bond. That deal faced plenty of competition for investor attention, coming on a day where 14 other borrowers were in the market. Despite that, the book hit a peak of nearly $20 billion.
In September, Enbridge also brought a $2 billion two-tranche hybrid bond – the biggest US dollar hybrid by a North American corporate – as well as a C$1 billion hybrid that Morgan Stanley also helped lead.
No mandate better illustrated the firm’s prowess than the work it did through the year for Enbridge
Those deals followed a $3 billion bond Enbridge completed in March, with Morgan Stanley again as a lead left and billing and delivery agent. The deal included a $2.3 billion 10-year sustainability-linked tranche – the biggest-ever such tranche in US dollars.
Enbridge is merely one example of what makes Morgan Stanley’s financing franchise so powerful, namely the firm’s ability to bring all parts of its business to bear in the service of a client that is attempting a transformative deal.
That skill was often deployed in less obvious ways, in deals that were still of defining importance for a client but less high profile.
The year was far from being an IPO bonanza in the US or anywhere, but one deal that illustrated Morgan Stanley’s fine equity capital market credentials was the May IPO of Acelyrin, an upsized $621 million deal where the bank was lead left bookrunner and stabilization agent.
Such was the effectiveness of the marketing that the deal was able to be increased in size twice from an initial $350 million level, where the deal was 10-times covered. Pricing at the top of the range, the flotation was notable for bringing in several particularly high-quality names that would normally shun IPOs.
Morgan Stanley has a well-regarded biotech franchise and the Acelyrin deal was the largest-ever float of a clinical-stage biotech.
